Shares of Wall Street banks Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) held up on Tuesday despite seeing first quarter earnings estimates cut by analysts at Citigroup (NYSE: C).
Stocks for both firms finished the session relatively flat, even with the news of a reduction to estimates.
Citigroup analysts believe the two banks saw weakness in their underwriting business during the first quarter, along with less equity trading activity, according a research note obtained by TheStreet.com.
For the first quarter, Citi expects Goldman Sachs to earn $4.45 a share, which is 10 cents lower than their original estimate for $4.55 a share. As for Morgan Stanley, the bank believes earnings will be 58 cents a share, down from earlier estimates of 72 cents a share.
Citigroup’s steeper cut on Morgan Stanley’s first quarter earnings estimate also came with reductions to full-year expectations for this year as well as 2011 and 2012.
Morgan Stanley posted a loss of 93 cents a share for 2009 on net revenues of $23.4 billion. However, paid back TARP funds and posted a fourth quarter profit of 14 cents a share.
Goldman Sachs performed much better, posting huge profits for the year of $22.13 a share, with $8.20 a share coming in the fourth quarter.
